Trash or treasure? - Best practice for dealing with abandoned goods

A recent appeal to the appellate jurisdiction of the Queensland Civil and Administrative Tribunal (QCATA) is a beneficial reminder to property managers regarding the process of dealing with abandoned goods in Queensland rental properties.

Abandoned goods generally

If a tenant has left any goods behind at a rental property (excluding personal documents or money), section 363 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (the RTRA Act) prescribes how the goods are to be dealt with.

Before disposing of any goods (or even moving any goods), a prudent property manager will ensure that a detailed written or electronic inventory is compiled. The inventory should note every single item left at the property which may be owned by the tenant, no matter how insignificant. The inventory should be signed and dated, kept on file and be supported by comprehensive photographic evidence. The photographs should note the date upon which they were taken. In addition, all model and serial numbers of any items left at the property should be recorded in writing, along with the general condition of all goods.

Section 363(2) of the RTRA Act provides that the lessor may sell the goods, or dispose of them in another way, if the lessor believes on reasonable grounds, that the goods:

1. Have a market value of less than $1,500 [1]; or
2. Storage of the goods would be unhealthy or unsafe, or would cause the market value of the goods to be completely or substantially depreciated; or
3. The cost of removing, storing and selling the goods would be more than the proceeds of the sale of the goods.

If the goods do not fall within the above categories, they must be safely stored for a period of one month [2]. The former tenant may claim possession of the goods (in writing) prior to the disposal of the goods, in which case the lessor may claim the reasonable costs of removing and storing the goods pursuant to section 363(7) of the RTRA Act. If the former tenant does not claim the goods within one month, the lessor may sell the goods at auction or apply to QCAT for orders to deal with the sale or disposal of the goods pursuant to section 363(4) of the RTRA Act.

If the goods are to be sold at auction, the lessor must provide notice of the auction by publishing a notice in a newspaper that is circulated in the general area of the property. The notice must provide a description of the goods, and the date, time and location of the auction. The auction must take place at least seven days after the notice is published [3].

If the goods are sold in accordance with the RTRA Act, the lessor may retain the reasonable costs of removing, storing and selling the goods. Any remaining proceeds must be paid to the Public Trustee within 10 days after the sale pursuant to section 363(8) of the RTRA Act.

Recent QCATA decision 

A recent decision of the QCATA [4] clearly set out a property manager’s obligations in executing what Member Gordon described as the ‘summary procedure’ under section 363(2) of the RTRA Act as set out above.

Member Gordon held that there are two different types of procedures which the lessor must follow to deal with goods left at a property. Of relevance in this instance was that the procedure which had to be followed depended upon whether the lessor believed on reasonable grounds that the market value of the goods was less than the amount prescribed in the regulation [5] ($1,500).

The summary procedure was that the lessor may sell or dispose of the goods. If the summary procedure cannot be used, because of any of the three reasons set out above, then the lessor must store the goods safely for one month.

Member Gordon noted that if the wrong procedure to sell or dispose of the goods is followed, then this is an offence (unless there is a reasonable excuse [6]), and a breach of the standard form residential tenancy agreement.

In this instance, the property manager claimed the total amount of the bond, being $1,120 for the costs of removing the goods, which the property manager considered did not exceed the value of $1,500.

The tenant disputed the claim on the bond. At an adjudication of the matter, the property manager was asked whether there were any things left at the property which they believed were valued at more than $1,500. The property manager said no, rather, what was left behind was an entire household of rubbish and junk.

However, the tenant argued during the adjudication that there were a number of expensive pieces of furniture including a refrigerator worth $1,000, a washing machine worth about $300, a bookcase with about $5,000 worth of books and so on.

Member Gordon held that the adjudicator at first instance had misinterpreted the test, in believing that the summary procedure could be followed if no single item of goods remaining on the property was of the value of $1,500 instead of the true test, that is, if the market value of the goods taken together was less than $1,500.

Member Gordon held that an email from the tenant to the property manager on the evening prior to the end of the tenancy would hold relevance in relation to this issue. The tenant’s email stated that he had not been able to clear out all of his possessions but noted that in excess of $2,000 worth of his personal effects and furniture had been left behind.

Member Gordon allowed the appeal against the property manager and returned the matter to the Tribunal for reconsideration.

Conclusion

When goods are abandoned at a property it can understandably be a difficult situation for property managers and lessors to deal with – particularly when an incoming tenant is expected. However, in order to avoid any breaches of the RTRA Act (which may attract a penalty of up to $6,192 [7]), and to protect the lessor’s position in relation to any bond claim, it is important to carefully follow the procedures set out in the RTRA Act.

Property managers should take a detailed inventory before dealing with the goods and ensure that any decision made by the lessor on the value of the goods is reflected in terms of the total market value of all the goods left behind.

Read more from the REIQ: New Housing Bill Introduced: Continuing Professional Development and Stage 2 Rental Law Reforms.

Or browse our suite of property management articles.